This presentation investigates the modelling and use of inverse magnetostriction in contactless mechanical stress sensing. The emphasis is on the dynamic behaviour of the magneto-mechanical system and the eddy currents induced in the sensed part as well as their effect on the evaluation of the stress-induced magnetization and stress. The measurements show that the stress-induced magnetization depends strongly on the pre-magnetization. The simulations show that the eddy currents reduce the sensed voltage and the magnetic flux density and introduce a time delay. An analytical method is also proposed for online application.